Bella Casa Fashion & Retail Ltd Management Discussions.


Your company is engaged in selling home textiles in domestic Indian market under its brand name "Bella Casa". The brand is well known for its innovative and original designs, good quality & affordable prices. The brand is endorsed by famous Bollywood celebrity Jacqueline Fernandez. The company has a co-branding arrangement with Disney Marvel for its kids offerings. Legendary super heroes & characters like Mickey & Minnie, Spiderman, Captain America are part of its kids collection. The company also has a similar arrangement with Hallmark Design Collection for its premium offerings. The complete focus is on increasing the distribution of the brand to all nooks and corners of the country. Currently the products area viable though 1000+outlets and the target is to add another 4000+outlets to its fold in next 2 years.

Your company also has a thriving women ethnic wear fashion business where the installed capacity of the company stands at 5 mn pcs/year. These products are sold mainly to large retail chains of India like Reliance Retail, FBB & Pantaloons.

Indian economic overview

India emerged as the sixth largest economy and retained its position as the fastest-growing trillion-dollar country. In January-March 2018-19 quarter, the GDP grew 5.8%, the slowest since 2014-15. Indias GDP growth rate fell from 7.2% in 2017-18 to 6.8% in FY 201819. In April, 2019, the International Monetary Fund (IMF) reduced Indias growth forecast by 20 basis points pegging it to grow by 7.3% in 2019-20 and 7.5% in 2020-21. (Source: IMF and Central Statistics Office).

The economic slump has been caused by temporary reasons, like the financial crisis in the NBFC sector. This affected credit expansion, financial markets and consumer sentiment, which resulted in slower GDP growth.

However, key initiatives implemented by policy makers over the last couple of years are likely to provide long-term fundamental strengths and nourishment to the Indian economy. In 2018, the country attracted more foreign inflows than China - US$ 38 billion, higher than Chinas US$ 32 billion. India witnessed a 23-notch jump to a record 77th position in the World Banks latest report on the Ease of Doing Business that captured the performance of 190 countries. The commencement of the US-China trade frictions opened a new opportunity for India, particularly in the agro sector. Inflation (including food and energy prices) was pegged at 2.6% on an annual basis, one of the lowest in years and well below the Reserve Bank of Indias medium-term target of 4%. The rupee rebounded after touching a low of ^ 74.45 to a dollar to close the financial year at ^ 69.44. During the fiscal under review, the Indian Government continued to invest deeper in digitalization, renewable energy capacity generation and infrastructure building.

Indian Textiles

Indian textile trade in the EU & US

India was the fourth-largest supplier to the EU. The average tariff on textile products faced by India in the EU stood at 5.9%. Indias textile and apparel exports to USA have grown at a CAGR of 2% in the last five years. The average tariff on textile products faced by India in the US is 6.2%. The US is the top export destination for textiles made in India with a share of 21%. 50% of Indias exports to USA were in the form of apparel, followed by home textiles with a considerable share of 37%. Indias largest exported commodity to USA in 2017 comprised bed and table linen. India has a strong presence in the home linen category in USA with a share of 40% of USAs total imports. (Source: Economic Times, Wazir Advisors)


The fiscal deficit for 2019-20 is pegged at 3.4% with a target of 3% by the 2020-21. India is expected to grow at 7.3% in FY2019-20, benefiting from the ongoing structural reforms. (Source: CSO, Fitch, Economic Times, Business Standard, IBEF, Business Today, India Today, IMF)

The size of Indias textile market is expected to reach US$ 223 billion market by 2021. The aggregate income of the addressable population (individuals with >US$9,500 in annual income) is expected to treble between2020-25. (Source: IBEF, Wazir Advisors)

The growing trade frictions between US and China will have implications for businesses the world over. The impact on Indian business could be positive. Indias competitiveness has been secured through large raw cotton availability, which puts it at an advantage over China in extending its value-addition chain from cotton to yarn to sheet to the final end product. We believe that the trade frictions could encourage a number of marquee US brands to seek alternative suppliers from countries like India.

Indian apparel industry

The Indian apparel industry was worth an estimated $54 billion in 2018 and projected to reach $118 billion in 2028 growing at CAGR of 8% over 2018-28 periods.

The countrys apparel market is majorly driven by menswear, which holds major share in the apparel business, accounting for 43% of the total market. Womens wear contributes almost 36%, while kids wear constitutes 21% of the apparel market. The sector is one of the fastest growing markets globally, supported by a robust demand growth.

The major challenges in the Indian apparel industry are increasing competition, sustained discounting that is expected to moderate margins and product obsolescence due to ever evolving fashion trends.

Indian retail sector

Indias retail industry growth is predominantly supported by expanding consumption patterns and rising income levels. With a dynamic demographic shift consisting of young consumers, the demand is expected to remain positive.

Moreover, the growing penetration of mobile and internet across the interiors of India has led to a significant rise in e-commerce shopping.

Bella Casa Fashion & Retail Limited is the most deeply penetrated retail networks in India and its products are now available in more than 4000 outlets across India.

Indian home textiles industry overview

India presently accounts for a 7% share of the global home textiles trade. India consolidated its position as the second-largest exporter of home textiles, while also being a prominent domestic consumer.

Indias bed linen consumption is expected to reach Rs.19,350 crore by 2021, growing at a CAGR of 8%. Towel consumption in the country is estimated to reach ^7,060 crore by 2021, curtains Rs.4,790 crore, blankets ?2,850 crore, upholsteries Rs.3,080 crore, kitchen linens Rs.2,400 crore, while rugs and carpets Rs.1,250 crore by 2021.

The home decor market will be driven by a growing real estate market and rising pride in home decor. Significant increase in the affordable housing and services sector, coupled with the rise in disposable incomes and improving lifestyles, are expected to strengthen the demand for home textiles. (Source: Wazir Advisors, Indian Retailer, Indian Textile)

Growth enablers

Growing urbanization, a higher disposable income of the Indian households and a favorable demographic coupled with an aspiration based purchasing pattern are key drivers for the industry and is likely to benefit the Company.

With the growing mobile and internet penetration, e-commerce shopping is expected to act as a key enabler in consistent sales volume growth for the industry.



- The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand

- Urbanization is expected to support higher growth due to change in fashion & trends


• 100 per cent FDI (automatic route) is allowed in the Indian textile sector Increased Competition from Local & Big Players.

• Our operations are in unorganized sector, is prone to changes in government policies


During FY 2018-19, despite challenging business environment your Companys total sales registered a growth of 17.50%, Net Revenue being 14723.50 Lacs in FY 2019 as against 12530.74 Lacs in FY 2018.


Financial Risks

The Companys policy is to actively manage its foreign exchange risk within the framework laid down by the Companys forex policy approved by the Board. Given the interest rate fluctuations, the Company has adopted a prudent and conservative risk mitigation strategy to minimize interest costs.

Commodity Price Risks

Volatility in prices of raw materials, energy inputs and finished goods may adversely impact profitability. The Company proactively manages these risks through forward booking, inventory management and proactive vendor development practices. The Companys reputation for quality, product differentiation and service, coupled with existence of powerful brand image with robust marketing network mitigates the impact of price risk on finished goods.

Interest Rate Risk

Any increase in interest rate can affect the finance cost. The Company is mitigating these risks through Continuous monitoring of interest rate trends.

Regulatory Risks

The Company is exposed to risks attached to various statutes and regulations. The Company is mitigating these risks through regular review of legal compliances carried out through internal as well as external compliance audits.

Human Resources Risk

Your Companys ability to deliver value is dependent on its ability to attract, retain and nurture talent. Attrition and non-availability of the required talent resources can affect the performance of the Company. The Company is mitigating these risks by Continuous benchmarking of the best HR practices across the industry and carrying out necessary improvements to attract and retain the best talent and Regular review, monitoring and engagement on personal development plans of high performers and high potential employees.


The outlook for the Indian textile industry continues to be positive. The factors which contribute to the India advantage are expected to continue over the medium term. This is expected to help India enhance its market share further in the other key geographies.


Your Company has in place internal control systems and procedures commensurate with the size and nature of its operations. Internal control processes which consist of adopting appropriate management systems and implementing them are followed. These are aimed at giving the Audit Committee a reasonable assurance on the reliability of financial reporting and statutory & regulatory compliances, effectiveness and efficiency of your Companys operations. The Internal Control Systems are reviewed periodically and revised to keep in tune with the changing business environment.


The Company recorded total revenue of Rs.14723.50 during the year under review as against Rs.12530.74 in the previous year thereby registering growth of 17.50 %. The profit after tax for the year ended 31st March, 2019 is Rs.877.59 as against Rs.569.88 in the previous year showing growth of 54%.


The Company firmly believes that motivated and empowered employees are the cornerstone of competitive advantage. The Companys employee value proposition is based on a strong focus on employee development, providing a satisfying work environment, performance appraisal and counseling and appropriate empowerment.

The Company continues to maintain and enjoy a cordial relationship with its employees, providing positive environment to improve efficiency with regular investments in upgrading the knowledge and skills of the employees


Further widening of our customer base

With the growing opportunities available in the market, we will endeavour to continue to grow our business by adding new customers in existing and new geographies, new market segments. We are looking towards expanding customer base in Middle East countries. We are also making efforts and diagnosing the domestic markets for our own brands product. With the widening of the customer base for our own Brand product we can leverage the production capacity and the experience of our production team. We aim to do this by effectively leveraging our marketing skills and relationships and focusing on total customer orientation.

Reduction of operational costs and achieving efficiency

Apart from expanding business and revenues we have to look for areas to reduce costs and achieve efficiencies in order to remain a cost competitive company. We try to reduce the wastages and control the production on the production floor through effective supervision. Our focus has been to reduce the operational costs to gain competitive edge.

To build-up a professional organization

We believe in transparency, commitment and coordination in our work, with our suppliers, customers, government authorities, banks, financial institutions etc. We have a blend of the experience and the sufficient staff for taking care of our day to day operations. We also consult with external agencies on a case to case basis on technical and financial aspects of our business. We wish to make it more sound and strong in times to come.

Focus on cordial relationship with our Suppliers, Customer and employees

We believe that developing and maintaining long term sustainable relationships with our suppliers, customers and employees will help us in achieving the organizational goals, increasing sales and entering into new markets.

Optimal Utilization of Resources:-

Our Company constantly endeavors to improve our production process, skill up-gradation of workers, modernization of machineries to optimize the utilization of resources. We analyze our existing raw material procurement policy and manufacturing processes to identify the areas of bottlenecks and take corrective measure wherever possible. This helps us in improving efficiency and putting resources to optimal use.


The statements in the "Management Discussion and Analysis Report" section describes the Companys objectives, projections, estimates, expectations and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.

For and on the behalf of the Board of Directors


Harish Kumar Gupta

Chairman & Whole- Time Director


Date: 14.08.2019

Place: Jaipur.